Working from home and tax relief
Working from home (also known as remote working or e-working) is where you work from home for substantial periods on a full-time or part-time basis.
You may be able to claim tax relief on the additional costs of working from home, including electricity, heat and broadband.
How do I know if I qualify?
Remote working is where you work from home for substantial periods on a full-time or part-time basis.
To qualify, you must:
- Have a formal agreement with your employer that you are required to work from home
- Be required to perform essential duties of employment at home
Remote working involves:
- Working for substantial periods at home
- Logging onto a work computer remotely
- Sending and receiving email, data or files remotely
- Developing ideas, products and services remotely
You are not entitled to claim tax relief if you bring work home from the office outside of normal working hours, for example in the evenings or at weekends.
More information on the eligibility criteria is available in Revenue’s Tax and Duty Manual on e-Working and Tax (pdf).
How much can I claim?
You may have extra costs when you are working from home including heating, electricity and broadband costs. Your employer can pay you a contribution towards these costs or you can make a claim for tax relief at the end of the year.
If your employer pays you a working from home allowance towards these expenses, you can get up to €3.20 per day without paying any tax, PRSI or USC on it. If your employer pays more than €3.20 per day to cover expenses, you pay tax, PRSI and USC as normal on the amount above €3.20. You should note that employers are not legally obliged to make this payment to their employees.
If your employer does not pay you a working from home allowance for your expenses, you can make a claim for tax relief at the end of the year. You will get money back from the taxes you paid. If you share your bills with someone else, the cost is divided between you, based on the amount paid by each person (see Example 2 below).
The amount of costs you can claim is based on:
- How many days you worked from home
- The cost of your expenses
- The percentage of your costs that Revenue counts as working from home expenses
You can claim relief on costs at the following rates:
- For 2022, 30% for electricity, heating and internet costs
- For 2020 and 2021, 30% for internet costs and 10% for electricity and heating costs
- For 2018 and 2019, 10% for electricity and heating costs only
You can only claim for the days that you work from home. This does not include times you may have brought work home to do outside your normal working hours.
Your annual costs are taken into account but you only get relief for the proportion of the days you spent working from home during the year. For example, in 2022 the proportion would be the number of days working from home divided by 365. For 2020, it was a leap year so you divide by 366.
How to calculate the amount of costs you can get tax relief on
For 2022, to calculate the amount of costs you can get tax relief on:
- Add your electricity, heating and internet costs and multiply the total costs by the number of days worked at home
- Divide by 365
- Multiply by 30% (0.3)
For the years 2020 and 2021, the relief for internet was 30%, as above. However, the relief for electricity and heating was 10%, so these costs would be calculated as follows:
- Add the costs for electricity and heating and multiply the total costs by the number of days worked at home
- Divide by 365 (or 366 in 2020)
- Multiply by 10% (0.1)
For the years 2018 and 2019, the relief for electricity and heating was also 10%, and calculated in the same way, but there was no relief for internet costs.
Amount of tax relief
When you know the amount of costs that you can get tax relief on you can calculate your tax savings. You get tax relief on the amount of your costs at a rate of 20% or 40%, whichever is the highest rate of income tax you pay.
If your employer pays you an allowance towards your expenses, that amount paid is deducted from the amount you can claim back from Revenue.
Mary worked from home for 9 months in 2021 while her office was closed due to COVID-19. To make a claim, Mary needs to work out how many working days she worked from home. She should exclude weekends, public holidays and any annual leave taken during the 9 months she worked from home. Her total working days are 168.
During 2021, her household bills for heating and electricity come to €1500 and her broadband comes to €450.
To find out how much tax she can claim back, she:
- Multiplies the amount due on the electricity and heating bills by the number of days she worked at home (€1500 x 168 = 252,000)
- Then, she divides her answer by 365 (252,000 / 365 = €690)
- Lastly, she calculates 10% of this amount to find out what she can claim for heating and electricity (10% of €689 is €69)
Mary uses the same method to see how much tax she can claim back on broadband.
- €450 (broadband bill) x 168 (days worked) = 75,600
- 75,600 divided by 365 = €207
- Revenue will let Mary claim 30% of the cost of broadband in 2021. 30% of €207 is €62.
This means, at the end of 2021, Mary can claim tax back on expenses of:
- €69 for heating and electricity
- €62 for broadband
- €131 in total
The amount she gets back depends on her rate of tax. If she pays tax at the higher tax rate of 40% she will get €52.40 back from her taxes (40% of €131). If she pays tax at the lower rate of 20%, she will get €26.20 back (20% of €131).
Sharon and Lar are married and both worked from home for 181 days in 2020 while their offices were closed due to COVID-19. Their household bills for heating and electricity come to €1,950 and their broadband comes to €600. They split the bills equally between them and each calculate the portion they can claim.
(Note: when calculating relief for 2020, divide by 366 days because it was a leap year. For 2021 and 2022, divide by 365 days.)
Cost of electricity and heat
Amount paid each €975 x 181 = 176,475
Divided by 366 = €482
10% allowable cost = €48
Cost of broadband
Amount paid each €300 x 181 = 54,300
Divided by 366 = €148
30% allowable cost = €45
At the end of the year, Sharon and Lar can each claim tax back on expenses of:
- €48 for heating and electricity
- €45 for broadband
- €93 in total
The amount they gets back depends on their rate of tax. If they pay tax at the higher tax rate of 40% they will each get €37.20 back (40% of €93). If they pay tax at the lower rate of 20%, they will each get €18.60 back (20% of €93).
What expenses can I claim?
Tax relief on e-working covers the additional costs of working from home. This includes:
Items you buy, such as laptops, computers, office equipment and office furniture, are not allowable costs for Remote Working Relief.
Should I pay tax on equipment from my employer?
If your employer gives you equipment that you need to do your work, like a computer or printer, and you mainly use it for work, it is not considered a benefit in kind. This means that you do not have to pay any tax for getting the equipment from your employer.
Capital Gains Tax
If you use only part of your home for e-working, your home remains your Principal Private Residence and you are not liable for CGT when you sell it.
You can get more information from Revenue.
How to applyYou can claim tax relief online using Revenue’s myAccount service. You can watch a short video explaining how to upload receipts.
To complete an Income Tax return online use the following steps:
- Sign into myAccount.
- Click on ‘Review your tax’ link in PAYE Services.
- Select the Income Tax return for the relevant tax year.
- In the ‘Tax Credits and Reliefs’ page (Page 4 of 5) select the ‘Your job’ tab. Select ‘Remote Working Relief' and insert the amount of expense at the ‘Amount Claimed’ section. (For 2018 and 2019, select ‘Other PAYE expenses’ under Tax Credits and Reliefs’).
You must be able to account for each expense you intend to claim. This means keeping a record of all receipts and bills. You should keep all documentation relating to your claim for 6 years from the end of the tax year to which the claim relates.
You may also need a letter from your employer stating that you work from home.